Charitable registration requires fair hearing before rejection, and the application was remanded for fresh consideration.

Rejection of a charitable registration application was set aside because the record showed that the assessee's compliance issues, including post facto approval sought from the Charity Commissioner, had not been fully examined and a fair opportunity to respond had not been afforded. The Tribunal held that final refusal was not justified at that stage and that supporting material should be considered before any fresh determination. The matter was remanded for reconsideration of the registration application after granting reasonable opportunity of hearing.

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Issues: Whether the rejection of the assessee's application for registration under section 12AB was liable to be set aside and the matter remanded for fresh consideration after granting reasonable opportunity of hearing.

Analysis: The assessee's application for registration was rejected on the ground that the trust had not timely obtained permission from the Charity Commissioner in respect of loans, and the authority also doubted the maintainability of the application. The record showed that the assessee had already moved the Charity Commissioner for post facto approval of the loans. The Tribunal found that the matter had not been examined on merits in a manner warranting final refusal at that stage and that further opportunity should be given to the assessee to place supporting material and respond to the notices. In these circumstances, and in the interest of justice, the Tribunal considered it to set aside the order and restore the matter for fresh adjudication.

Conclusion: The rejection order was set aside and the matter was remanded to the authority to decide the registration application afresh after granting reasonable opportunity of hearing; the issue was decided partly in favour of the assessee.

Ratio Decidendi: Where an application for charitable registration is rejected without adequate opportunity to explain compliance and supporting circumstances are pending consideration before another statutory authority, the matter should be remanded for fresh decision in accordance with law after granting a fair hearing.

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